Worried for the future: Dr Lian Lloyd with a patient at his Quorn practice.

ABC News

A country GP says the plan for patients to make a $7 Medicare co-payment could be the "death knell" for his medical practice and that might leave a South Australian regional hospital without a doctor.

Tony Lian Lloyd works at the outback town of Quorn and bulk bills about 90 per cent of his patients, many of them elderly, struggling for money or Indigenous.

He is worried that having to impose the co-payment might mean only patients with acute medical issues turn up, and his GP business could become economically unviable.

"I have to get some sense of feeling that I am being paid for my worth," he said.

"For me it would be a death knell, pure and simple.

"With my Indigenous population, my aged care population, many farmers who really haven't paid substantial tax in many years ... trying to make a business living out of it, we couldn't sustain it."

The Federal Government announced the $7 co-payment plan in the budget but legislation is yet to get through Parliament.

Rural doctors say bulk billing incentive will go

The National Rural Health Alliance said the proposed new arrangement would also see country GPs lose their current bulk-billing incentive.

Health services are a big part of the investment in the social capital of a country and a town and it's often a big part of the employment structure of a town.

Dr Tim Kelly

"If they bulk bill they will be $12 to $13 worse off," Alliance chair Tim Kelly said of complex changes proposed to billing arrangements.

Dr Kelly said the costs of running a country practice differed from those for metropolitan clinics.

"They have higher costs, do more complex work and to make their businesses unviable when they are contributing so much to the community ... it's not on," he said.

As the only doctor in his rural community, Dr Lian Lloyd both runs his private practice and works at Quorn Hospital, a medical facility with about 60 staff.

He said the practice he had run for about two decades would not remain viable without the hospital work, and it in turn relied on having a doctor available.

Locals might have to travel further for health services

Dr Lian Lloyd fears the demise of his medical practice could also see the hospital end up closing, forcing outback residents to travel further to find their health services.

Quorn locals have made clear they do not want to be left without health services.

"It's not an optional extra to have a hospital and a doctor in rural areas," said one, when the ABC sought views at a local Probus meeting.

"It is not only just for ourselves personally but this is very much a town where a lot of tourists come from all over Australia and overseas," another said.

Dr Kelly agrees.

"It's not always the most efficient model from a metropolitan perspective or bureaucratic perspective to have hospitals dotted everywhere, but health services are a big part of the investment in the social capital of a country and a town and it's often a big part of the employment structure of a town," he said.

Dr Kelly said Government changes also had affected specialist training programs for country GPs.

"What we are seeing now is the loss of 12 years of investment in a program that was very successful, and again with GP training there's been a substantial shift, there are new tenders being asked for GP training providers and there's going to be a lot of uncertainty for the registrars and the practices," he said.

Federal Health Minister Peter Dutton was unavailable for an interview, but in a statement defended the proposed $7 co-payment.

"Each year we raise $10 billion from the Medicare levy and we spend $20 billion," Mr Dutton said in the statement.

"The gap grows each year and if we want to make Medicare sustainable we must make changes.

"The $7 co-pay means doctors are $2 better off and that will allow patients who can't afford the $7 to be bulk billed.

"There is a second safety net that operates, where after their first 10 GP, pathology or diagnostic services, people who are concession card holders or under 16 years of age go back to bulk billing."